A vital stage in our process when discussing the possibility of Equity Release is to ensure all other options of raising the funds required have been discussed and discounted. Here are some examples of situations where we felt Equity Release was appropriate, and the clients agreed.

Home Improvements

Mr & Mrs S. have lived happily in their village surroundings for nearly 20 years and are now in their 70’s.

Not wanting to move home, they needed to make some improvements and alterations to their bungalow to keep it as comfortable and functional as possible.

Their monthly pension income is sufficient to cover general living costs but their savings have gradually been spent over the years and they didn’t now have the spare capital to fund the work they wanted.

We met Mr & Mrs S along with both of their daughters, one of whom we had been recommended to, to discuss their options and find out if we could help.

We arranged an Equity Release plan to not only provide the funds required for the initial work, but also with the option of a Drawdown facility allowing Mr & Mrs S access to further funds if required. A year after the initial release, the drawdown facility was used- a simple and easy process with no additional set up costs for the client. Interest is only charged on funds upon release.

Existing Equity Release review

A client of ours held Power of Attorney for her parents and asked us to review an Equity Release loan they had arranged in 2005. We offered to review this arrangement (initially set up by another firm) to see if it was still fit for purpose.

Our research found that the interest rate on the existing plan was nearly double the rate a modern day arrangement might offer. It was clear from our conversations with our client her parents could save a considerable amount of interest by “re-mortgaging” to a new lender and an up to date product making use of the lower interest rates now available. We found that, in this case, there would be no early repayment charges to redeem the original loan as the provider had left the market.

The family were delighted as this straightforward process significantly reduced the interest rate and was certain to slow down the effect of interest roll-up, leaving a larger inheritance for their beneficiaries.

Lifestyle

A long-standing client of ours recommended that his father speak to us about the options available to him with plans for a “round-the-world trip of a lifetime” that he and his wife had been dreaming of for some time.

Keen travellers already and both now retired, Mr & Mrs P wanted to raise a cash lump sum to fund their trip with the option for further drawdown in the future if required.

They had recently moved to a bungalow and spent the majority of their savings on renovating their new home so did not have the spare cash required for their dream trip. It was clear from our conversation that using their home as a means of raising the funds was a potentially suitable option.

A Lifetime Mortgage was arranged smoothly and efficiently with the money being available to Mr & Mrs P within a matter of a few weeks, with detailed plans for the trip now in full swing!

Helping family

Mr & Mrs S wanted to help their daughter with a deposit to buy her first home.

Not wishing to use their savings and pension funds, it appeared that making use of the value in their home would be a suitable option.

With our clients keen to preserve a level of equity within their property, we arranged a suitable Equity Release plan allowing penalty-free payments (to be made by the daughter) towards the plan to help cap or even reduce the balance of the loan against their home.

Helping their daughter set up home was immensely satisfying for Mr & Mrs S and their daughter was able to make that important, but often difficult, first step on to the property ladder.

Clearing existing borrowing

A long standing client of ours was interested in using Equity Release to clear some existing borrowing and to free up some of their income that was being used to service the borrowing.

Having assessed all possible alternatives, we arranged a plan to release a lump sum sufficient to clear the borrowing which didn’t require monthly payments, in turn increasing the client’s disposable income.

*Using an Equity Release plan that charges compound interest to clear existing borrowing can increase the true cost of the borrowing.